GST returns to be simplified? Meeting today, here's what is on agenda
Nandan Nilekani, the non-executive chairman of the Infosys that is implementing the GST Network (GSTN), is also likely to attend the meeting. About 40 industry and trade bodies are likely to participate in the meeting, sources said.The GoM will also consult tax experts on how to simplify the return filing, sources said.
The Group of Ministers (GoM), headed by Bihar deputy chief minister Sushil Modi, will meet today and hold consultations with the stakeholders to discuss simplification of goods and services tax (GST) return filing process. Nandan Nilekani, the non-executive chairman of the Infosys that is implementing the GST Network (GSTN), is also likely to attend the meeting. About 40 industry and trade bodies are likely to participate in the meeting, sources said.The GoM will also consult tax experts on how to simplify the return filing, sources added.
The requirement of filing multiple return forms in a month is likely to be brought down to one. The GoM is likely to discuss merging GSTR-1, 2 and 3 forms as one of the options to simplify return filing. Currently, the businesses file GSTR -1 and 3B for sales return and summary return, respectively. The current system will continue till 30 June. The GoM is also likely to consider a proposal for allowing return filing only twice a year for businesses having zero tax liability for six months in a row, sources said.
However, before simplifying the forms, a consensus has to be built on a host of issues ranging from invoice matching, provisional input tax credit (ITC) and reverse charge mechanism (RCM), sources said. The government is also working on to bring the invoice matching process in a simpler format. It is mulling bringing back the suspended invoice matching following the concerns over tax evasion. Nilekani has suggested that the buyer should be allowed to claim ITC on basis of the invoices uploaded by the supplier.
So, the seller will upload the invoice and buyer will acknowledge it. On the other hand, the tax administrators feel that “both the supplier as well as the buyer should upload the invoices before the ITC is claimed by the buyer. This way, the buyer will not be totally dependent on the supplier. Sometimes, the supplier may miss out on some invoices,” sources in the finance ministry said.
On the reverse charge mechanism, the view so far has been that it should apply to the manufacturers as well as the traders, sources said. The RCM is meant for anyone who purchases from the unregistered dealer (those not registered under GST). Under the reverse charge mechanism, the buyer is liable to pay the tax instead of the supplier. The person receiving the goods or services collects the tax and deposits with the government. There is also a view that RCM should apply to the composition scheme, sources said.
Once these issues are sorted, the many columns in the tax return form will be done away with. “Finally, there is going to be only one form GSTR-1 with invoices as attachment. However, 3B will continue until the GST stabilises,” sources said. On Monday, Modi had chaired a meeting on the RCM in Delhi.
(By Anjul Tomar, DNA Money)